Standing Committee B

[Mr. Jonathan Sayeed in the Chair]

Energy Bill [Lords]

Clause 2 - Annual reports under section 1 of the Sustainable Energy Act 2003

Amendment proposed [Thursday 20 May] 
clause 2, page 2, line 7, leave out 'and demonstration' and insert 'demonstration and deployment'. —[Dr. Turner.] 
 Question again proposed, That the amendment be made.

Jonathan Sayeed: I remind the Committee that with this we are discussing the following:
 Clause 2 stand part. 
 Clause 3 stand part. 
 Amendment No. 39, in 
clause 194, page 149, line 41, after 'section', insert 
 'and section [amendment of Sustainable Energy Act 2003]'. 
Government new clause 7—Reports under section 1 of Sustainable Energy Act 2003—and amendment (a) thereto: 
after ''clean coal technology;'' insert '(aa) coal mine methane;'. 
New clause 8—Environmental targets— 
 '(1) The Secretary of State shall within six months of this Act receiving Royal Assent lay before each House of Parliament a report, prepared in consultation with the devolved administrations, on renewable energy and that report shall include— 
 (a) a set target for the reduction of greenhouse gas emissions, with individual targets for each area covered by devolved administrations as agreed between the Secretary of State and the relevant devolved administrations for the following ten year period, 
 (b) a set target for the percentage of electricity to be generated by renewable energy sources, with individual targets for each area covered by devolved administrations as agreed between the Secretary of State and the relevant devolved administrations for the following ten year period, 
 (c) the amount of electricity being generated by each method of renewable energy, and 
 (d) a strategy for meeting the targets set out in paragraphs (a) and (b). 
 (2) In each year thereafter the Secretary of State shall lay before each House of Parliament a report setting out— 
 (a) progress made towards the greenhouse gas emissions reduction target, 
 (b) progress made towards the renewable energy target, 
 (c) the amount of electricity being generated by each method of renewable energy, and 
 (d) strategy for meeting the continuing targets for both greenhouse gas emissions and renewable energy with proposals for any changes necessary for meeting the targets set in subsection (1)(a) and (b). 
 (3) At the end of the initial ten year period, and every ten years thereafter, the Secretary of State shall lay before each House of Parliament a report setting out the measures specified in 
subsection (1) for the following ten year period and in every year thereafter lay before each House of Parliament the report specified in subsection (2).'. 
New clause 9—Report on sustainable energy policy commitments— 
 '(1) It shall be the duty of the Secretary of State to publish in such form as he sees fit an annual report on all the Government's energy policy commitments. 
 (2) In this section the term ''energy policy commitments'' means all those commitments so specified on the Government sustainable energy policy network website for the time being.'. 
New clause 10—Amendment of Sustainable Energy Act 2003— 
 After section 2 of the Sustainable Energy Act 2003 there is inserted— 
 ''2A Energy efficiency of business and public sector buildings: Secretary of State 
 (1) The Secretary of State must within one week beginning with the coming into force of this section designate under this subsection at least one energy efficiency aim. 
 (2) For the purposes of this section an ''energy efficiency aim'' is an aim which— 
 (a) is contained in a published document; 
 (b) relates to the energy efficiency of business and public sector buildings; 
 (c) specifies the amount of carbon dioxide to be saved from business and public sector buildings; and 
 (d) is compatible with European Union obligations and any other international obligations of the United Kingdom. 
 (3) The Secretary of State may, at any time after designation under subsection (1), designate under this subsection a further energy efficiency aim or aims. 
 (4) Where an energy efficiency aim is for the time being designated under this section, the Secretary of State must take reasonable steps to achieve the aim. 
 (5) In deciding which steps to take for the purposes of subsection (4), the Secretary of State must consider steps relating to the heating, cooling, ventilation, lighting and insulation of business and public sector buildings. 
 (6) A designation under this section may be withdrawn, but not if its withdrawal would result in there being no energy efficiency aim designated under this section. 
 (7) If an energy efficiency aim designated under this section ceases to meet the condition in subsection (2)(d) it ceases to be designated under this section, but if this results in there being no energy efficiency aim so designated the Secretary of State must without delay designate a new energy efficiency aim. 
 (8) A designation of an aim under this section, or a withdrawal or cessation of such a designation, must be published in such a way as the Secretary of State considers appropriate. 
 (9) A designation may be contained in the same published document as the aim itself. 
 (10) In this section ''business and public sector buildings'' means buildings specified under any enactments or otherwise as business or public sector buildings. 
 (11) This section shall come into force on 1st January 2005.''.'. 
New clause 12—Duty relating to energy provision and use— 
 'The Secretary of State shall have a duty to promote the efficient provision and use of energy [gas and electricity], and to reduce the emissions of greenhouse gases.'.

Stephen Timms: I welcome you back to chairing our deliberations, Mr. Sayeed, and I welcome back all members of the Committee following our weekend break. We had a good discussion on Thursday on this group of amendments. I thought that in responding I would start with my proposal to delete
 clause 3 and replace it with Government new clause 7 because much of the discussion focused on that last week.
 There are two elements to this proposal. First, should there be a Government commitment to a figure for carbon savings from household energy? As it might be unclear from the record, I want to make it absolutely clear that the Government believe that there should be such a commitment. We have a mechanism for providing it in the Sustainable Energy Act 2003, which came on to the statute book as a result of the work of my hon. Friend the Member for Milton Keynes, North-East (Brian White). The Government proposal uses that mechanism so as to be consistent with the work that has been done in Parliament on this, rather than to cut across it, as clause 3 would, by putting a figure in the Bill, with all the drawbacks that that entails. There is complete agreement across the Committee about the rightness of there being a clear commitment. 
 Secondly—this is an issue on which much of the discussion on Thursday focused—what should that figure be? In the White Paper we suggested that it should be around 5 million tonnes of carbon savings. The figure that has been published is 4.2 million; if one takes the reasonable view that around five means more than four and less than six, the figure is consistent. The announcement made the other week sits alongside the increased commitment on energy efficiency for business. Total carbon savings from energy efficiency across both sectors will be appreciably more than the numbers set out in the White Paper. It is important that we deliver carbon savings. 
 I understand the concerns that were forcefully expressed in our debate on Thursday. I listened carefully to all the points that were made. I agree that we should be aiming high in this area. We should be aspirational. The figure of 4.2 million tonnes is the minimum that I would expect to be achieved. I am also concerned about the industry's sense that there has not been a good dialogue with the Government in this process. That also needs to be addressed. Together with my noble Friend Lord Whitty, who leads on this matter, I will arrange to meet representatives of the industry and those who are particularly concerned about the household energy efficiency aims. We will do that before Report.

Brian White: The Sustainable Energy Act allows for a review of that figure. Will my hon. Friend the Minister undertake to consider using that review mechanism once Ministers have met industry representatives and if they convince Ministers of the need to increase the figure to provide security for investment?

Stephen Timms: There is a review mechanism and, as I understand it, the efficiency commitment is due to be reviewed in 2007. I will certainly consider my hon. Friend's point. I believe that the commitment that has been made will lead to a substantial stepping up of activity in this area, compared with what we have seen
 in the past, so it is a big step forward. The Under-Secretary of State for Trade and Industry, my hon. Friend the Member for Edinburgh, South, recently launched the Newcastle warm zone, and there is a warm zone in my constituency. There is a great deal of activity on this issue. Because of the commitment that has been published, we will see much more in the future than we have in the past.

Paddy Tipping: Will my hon. Friend the Minister confirm that the purpose of the meeting with outside bodies is to reinforce the 4.2 million tonnes target as the minimum, and that the aspiration is to increase it? If we can do better than the target, that will be in everyone's interest.

Stephen Timms: My hon. Friend is right. The other aim of the meeting will be to ensure that there is a good dialogue between Government and the industry as we go forward to ensure that the quite serious disappointment that has been expressed up to now does not recur.

Joan Walley: As well as talking with the industry, will my hon. Friend be able to see whether the starting point of 4.2 million tonnes could be raised immediately should he have evidence that that was achievable? Will he confirm that we could start at a higher level, rather than waiting until 2007 for the review to take place? In view of the concerns that I expressed last week, will he look with civil servants to see whether there are discrepancies in the way in which the figure that led to the starting point of 4.2 million tonnes was arrived at?

Stephen Timms: I cannot hold out to my hon. Friend the prospect of the figure of 4.2 million tonnes immediately being changed, given that it has only just been announced. However, I certainly agree that we should aim high. I see 4.2 million tonnes as the minimum that we can expect to achieve and I hope that we will be able to do better, as my hon. Friend the Member for Sherwood (Paddy Tipping) said. I shall return to the other points in a moment.

Michael Weir: I am slightly encouraged by what the Minister is saying, but a great deal of concern was expressed by hon. Members on both sides of the Committee last week about the fact that the aim was not enshrined in legislation. As I understand it, that was the reason for clause 3. Does the Minister intend to enshrine 4.2 million tonnes as a legislative target, or how does he intend to do that? There is concern that if the target is not in legislation, it can easily slip.

Stephen Timms: No. We have considered this matter over quite a long period, and the great achievement of my hon. Friend the Member for Milton Keynes, North-East in the Sustainable Energy Act 2003 was to come up with a mechanism that allowed a figure to be set for the energy efficiency commitment and for the Government to have an obligation to do what they can to achieve that aim. That mechanism was put on the statute book last year and is, in my view, the one that we should use, because a great deal of work went into
 what was a valuable step forward. The 2003 Act sets out the commitment relating to that number. The number is not printed in legislation, but that would not be the right way to set about effecting the change that we want. The energy efficiency commitment has a clear status, which is set out in the 2003 Act, and will allow the step change in activity and achievement that we all want to see.
 The hon. Member for Hazel Grove (Mr. Stunell) suggested that the reason why more carbon could be saved in the business sector was because of a shrinkage in manufacturing. The answer is yes and no. It is true that structural changes have affected absolute carbon emissions, but energy efficiency in the sectors have also been improving. The hon. Member for Vale of York (Miss McIntosh) pointed out that carbon emissions rose last year, which was because of a higher than expected growth in the economy, so it is not true that the current structure of the economy avoids the past difficulties of economic growth leading to higher emissions. We need to do better on energy efficiency in the business sector. For example, since 2001, climate change agreements have roughly tripled the rate of improvement for the sectors that they cover, which has resulted in a doubling in the rate of energy efficiency improvements for industry as a whole. That has gone well, and it is right to give credit where it is due for that achievement.

Andrew Stunell: I see that the Minister is fulfilling my prophecy that he would have calming words for us. However, is it not true that the fastest growing sector of energy consumption is the commercial sector and the fastest shrinking is the industrial sector? That is in no small part due to the measures that affect industry and the failure to introduce measures that affect the commercial sector. In his energy efficiency document, the Minister referred to a new aim to deliver savings of 4.2 million tonnes. Is it not true that that the regulator, Ofgem and everyone else will work to that figure and that it will become the maximum rather than a minimum?

Stephen Timms: No, I do not believe that it will be the maximum; we can aim to do better. I also do not agree about the distinction between the commercial and industrial sector. The climate change levy applies to the commercial sector, and there are significantly increased incentives for energy efficiency in the commercial sector. Part of the improvement that we have seen and the fact that there are now better prospects for saving energy in the business sector as a whole reflect improvements in the commercial as well as manufacturing sector. I am not saying that structural changes in the economy have had no impact—they clearly have—but the fact that things are looking better than they were at the time of the White Paper a year ago is to be welcomed.

Joan Walley: I am getting anxious about the reassurance that I was looking for in respect of re-examining how the civil service arrived at the figures. Will the Minister also comment further as to whether
 he has any power to convey to the regulator that the figure of 4.2 million tonnes is aspirational rather a maximum?

Stephen Timms: On my hon. Friend's first point, I am happy to ensure that the calculations are circulated to all Committee members. I will look at them again, and if Members have concerns, I will be happy to take them up. I will also be happy to emphasise in my discussions with the regulator and others that we all want to achieve as much as possible in saving energy in the household sector.

Brian White: While debating the Utilities Act 2000, I was given similar assurances on combined heat and power, but we have had problems since. Will the Minister examine the history of CHP in light of the assurances given at that time, reflect on those that he is giving on energy efficiency now and ensure that history does not repeat itself?

Stephen Timms: I will be happy to reflect in the way that my hon. Friend suggests. We will discuss combined heat and power later, so he will no doubt raise that point again at that stage.

Richard Page: I want to ensure that I have got things clear. The Government are making policy on the hoof. There has been a Government White Paper, the Bill has gone through the Lords and the Government have had discussions with industry, so the CO2 targets and achievable figures should already be known. We should not be consulting industry to decide them now. Will the Minister table an amendment on Report to new clause 7 to add CO2 targets so that we know what we are aiming for?

Stephen Timms: I am grateful to the hon. Gentleman for giving me the opportunity to make clear that that is not what I intend to do. We already have a mechanism, through the Sustainable Energy Act 2003, which allows us to set those objectives—[Interruption.] I see from his mirth that he knows that. The figures have been set. I hope to ensure that, through the discussions that my noble Friend and I have with representatives of the industry before Report, we have the adequate dialogue with industry that we have not had until now.
 We are already required to publish an annual report on progress made towards the energy White Paper's objective; that was another benefit from the Sustainable Energy Act, for which my hon. Friend the Member for Milton Keynes, North-East was responsible last year. To achieve our aims we will need wide participation from large numbers of interested parties. We have a vested interest in ensuring that our plans are open to public scrutiny, because that will improve them. 
 New clause 7 retains the principle behind clauses 2 and 3 in a way that amends the general reporting requirement in the Sustainable Energy Act, so that the relationship between the new and existing duties is clear. The proposal will require information to be provided on exactly the same list of low-carbon energy sources currently set out in clause 2. There was 
 discussion last week about the significance of the order in which the items occurred in that list. All we have done, to be helpful, is to reproduce the order in which they appear in clause 2.

Colin Challen: Why has the word ''nuclear'' appeared when the original intention of the Sustainable Energy Act was to consider renewables?

Stephen Timms: The answer is the same as the one I gave a second ago; it is the same wording as in clause 2 of the Bill. We wanted to make minimal changes to what was already in the Bill but put it in a form that was consistent with the Sustainable Energy Act. We have not deleted things from clause 2 that members in the other place wanted to be there. As my hon. Friend rightly said, the word ''nuclear'' was included in the other place and is retained in new clause 7.
 However, new clause 7 goes further in adding proposed new subsection (1B)(j), which broadens the requirement to include any other sources of energy that may help reduce carbon emissions. That will include solar energy, which was mentioned last week, and carbon capture and storage, as mentioned by my hon. Friend the Member for Wansbeck (Mr. Murphy) in his helpful contribution on clean coal technology. 
 I am prepared to accept the amendment tabled by my hon. Friend the Member for Sherwood (Paddy Tipping), which would add coal mine methane to the list of energy sources and technologies in subsection (1B) of new clause 7. The new clause departs from clause 2 in other ways to make the provision workable: for example, it sets out the information that the Government have the ability to collect. It also provides a more realistic basis for reporting and requires the Government to publish information on what is done to ensure 
''the maintenance of the scientific and engineering expertise available in the United Kingdom that is necessary for the development of potential energy sources'' 
listed in the subsection. 
 It was suggested in our debate last week that the implementation of the large combustion plant directive was going to be delayed, but that is not the case. The point made by the Minister for the Environment and Agri-environment at Environment questions last week was that it is a complex directive with significant potential ramifications for large combustion plants in a range of sectors. We are taking time to reach a fully informed decision, but the implementation date is 1 January 2008, which has not changed.

Anne McIntosh: What emerged from Question Time last week is the fact that there are two options available to the Government for the implementation. We very much favour some regard being paid to clean coal technology. At what point do the Government intend to consult widely with
 industry to consider which option they favour, bearing it in mind that there is much support for that technology from Government Members?

Stephen Timms: We are consulting widely and have been doing so for some months. I expect that we shall announce our conclusion in the next few weeks; we want to be able to do so by the end of June.
 In amendment No. 8, my hon. Friend the Member for Brighton, Kemptown (Dr. Turner) suggests adding the term ''deployment'' alongside ''research, development and demonstration'' as areas to be reported on in relation to the energy sources listed. As he pointed out, if what I am suggesting to the Committee is agreed, his amendment would not work as clause 2 would not be there to amend. However, I am happy to table on Report a Government amendment to new clause 7 to add the term ''deployment'' in the way that he suggests. I hope that that will satisfy his concern. 
 New clause 8 would impose a duty on the Secretary of State to set targets on curbing greenhouse gas emissions and on 
''the percentage of electricity to be generated by renewable energy sources'', 
together with reporting on those targets. We are committed to reducing greenhouse gas emissions by 12.5 per cent. by 2012, and to reducing carbon dioxide by 20 per cent. by 2010. Compared with most other European countries, we are most likely to achieve our Kyoto objectives, and I am confident that we shall. 
 We are committed to sourcing 10 per cent. of UK electricity from renewable sources by 2010. The devolved Administrations in Scotland, Wales and Northern Ireland are already promoting renewables, and my officials are working closely with officials there. However, specifying percentages of electricity to be generated by each renewable source, as the new clause does, would be too prescriptive. 
 One of the principles of the obligation, and one of its benefits, relates to the fact that we cannot predict exactly which technologies will be the most successful or when that will be the case, because some of those technologies are still in their infancy. It would not be helpful for us to attempt to predict precisely how much each technology would contribute some years ahead. That could hamper other developments that are not clear to us at present, but which will in due course help us to achieve our overall objective.

Michael Weir: The Minister misunderstands the proposal. The intention is not to specify set amounts for each source of renewable energy, but to have an overall target for renewable energy and to report annually the amount from each source within that overall target. We could then see how we were progressing towards the target. Concern was expressed in the earlier debate that ambitious targets are being set without knowing whether many types of energy generation can meet those targets within the specified time scale.

Stephen Timms: I can reassure the hon. Gentleman on the amount of information that will be published. There is a large amount of information on the
 sustainable energy policy network website and we will continue to keep that up to date over the coming months, so that people know exactly how we are progressing. Reports on how much each technology contributes will certainly be available.
 One of the questions I was asked in the debate last week was how much capital funding we are providing for technologies other than wind. In the spending review period 2002-03 to 2005-06 we are making available £117 million in capital grants for offshore wind, although there are no grants for onshore wind developments. We also provide £66 million for biomass capital grants; £25 million through a major photovoltaics demonstration programme; £10 million for community and household projects; £10 million for energy research; £5 million for wave and tidal energy; and £4 million for embedded generation. In addition, we provide £19 million every year for research, development and demonstration through the new and renewable energy programme for all those technologies. 
 New clause 9 would add a requirement for an annual report on the commitments specified on the sustainable energy policy network website. There is already a requirement to publish an annual report. I know that my hon. Friend the Member for Milton Keynes, North-East, who tabled the new clause, is familiar with the website, which we aim to update every month. The aim of the new clause will be more than met by the arrangements that are in place. 
 New clause 10 would require the Secretary of State to publish an energy efficiency aim for business and public sector buildings. I suggest to the Committee that focusing only on buildings would be unhelpful. We need to examine energy efficiency across business, including the energy efficiency of equipment and industrial processes. In the energy efficiency action plan, we have set out programmes to deliver carbon savings across business and the public sector. As I said earlier, the measures that we have introduced in that area are effective, so there is no need for a separate statutory target relating to buildings. 
 I have spoken at length about the Government's commitment to promoting the efficient provision and use of energy, and the reduction of greenhouse gas emissions. The danger of new clause 12 is that it would increase the likelihood of a legal challenge from those who have different views on the steps that the Government should be taking.

Robert Key: Since last week, tectonic plates have shifted, to paraphrase the Deputy Prime Minister. We will shortly be invited to vote on a series of amendments that are fundamental to the Bill. The Minister will have seen the article in The Independent yesterday by the great environmental hero Professor James Lovelock, who said:
 ''We have no time to experiment with visionary energy sources; civilisation is in imminent danger and has to use nuclear—the one safe, available, energy source—now or suffer the pain soon to be inflicted by our outraged planet.'' 
Will the Minister let us know his thoughts on Professor Lovelock's article, which is so important to the future of energy provision?

Stephen Timms: That does not arise in the context of this group of amendments, although we are about to come to parts of the Bill that deal with nuclear power. I have seen the article to which the hon. Gentleman refers—

Robert Key: Don't rubbish it.

Stephen Timms: I am not rubbishing it, but I caution the hon. Gentleman and others against believing that nuclear power is a quick fix. We need to focus our attention on making headway in the development of renewable energy. We made it clear in the White Paper that we might need to consider the prospect of new nuclear power, but at present the economics are very unattractive. There are some big questions about nuclear waste still to be answered, but this is not the time to discuss them. We shall look at the matter again when we debate the next section of the Bill.
 On the basis of what I have said to the Committee, which reflects hon. Members' concerns, and given my point about meeting the industry and providing further information, I hope that the Committee will accept the proposal.

Laurence Robertson: I welcome you to the Committee, Mr. Sayeed.
 We have had a long debate over three sittings on these important clauses, and most members of the Committee have taken part, which is a welcome change, as Government Members often do not participate. 
 We have heard much about the Sustainable Energy Act 2003, on which I made my first speech as shadow spokesman. The speech was memorable as it took about 30 seconds to make at about half-past 2 on a Tuesday when it finally got through the Commons. The Act, too, was memorable because it was considerably weakened compared with the original drafting because targets were removed. Since enactment, an early-day motion has been tabled on strengthening the measure. 
 Clause 3, which has drawn a great deal of support from both sides of the Committee, is useful because it strengthens the Bill in equal measure to the weakening of the Sustainable Energy Act due to the removal of targets. 
 I asked the Minister to justify replacing clause 2 with new clause 7 and he has gone some way to doing so, but I must ask my hon. Friends to support clause stand part. My only slight concern, which relates to the mechanics of the Committee and how we consider amendments, is that I have considerable sympathy for amendment (a), which was tabled by the hon. Member for Sherwood and which would include coal methane in the energy sources listed in clause 2, and indeed in the Minister's new clause. I think we will have an opportunity to vote on that separately, and I shall ask my hon. Friends to consider supporting it. 
 We want to keep the clauses as they stand. I am becoming concerned about the position of renewables, and that point is emphasised by the intervention about nuclear energy by my hon. Friend the Member for Salisbury (Mr. Key). Again, we can return to that 
 debate in the near future—probably under the next set of amendments—but it shows the position that we are in. As we discussed on Second Reading, the contribution from nuclear sources is about 22 per cent. of our electricity; in 10 years' time, that will be down to 2 per cent. There is a very long way to go between now and then to bring renewables up to speed to replace the missing 20 per cent. Even if we achieve that, we will have gone nowhere on carbon reductions, because nuclear does not contribute to carbon emissions. My hon. Friend made a good point, if prematurely, and no doubt we can return to it. I ask my hon. Friends to support the retention of clauses 2 and 3.

Andrew Stunell: I said at the previous sitting that I expected the Minister to administer ointment and balm during our discussions, and he has done his best to do so. He presented new clause 7 in the best possible light, but it still deletes the targets and limits the Government's obligation to report on matters that the Secretary of State wants to report on rather than matters that should be reported on.
 I was particularly interested in the Minister's reinterpretation of 5 million tonnes as something less than 6 million tonnes but more than 4 million tonnes. I do not know whether he has ever tried that approach in a magistrates court, but I suspect that it would not get very far. I am not sure whether a group of school governors could get away with such an approach to targets with Ofsted. The reason why one could not get away with it in a magistrates court or with Ofsted is that we would be talking not simply about an aspiration, but about a legal requirement. Every member of the Committee who has spoken except the Minister wants a proper, official statutory requirement. He has disappointed us tremendously by failing to go for that. 
 I have said before that the difficulty is that the regulator, who has one of the principal duties to ensure that things happen, takes a narrow view of the tasks. There is no doubt that if the measure does not contain a figure, Ofgem will take the view that it can allow the market to dictate progress, and if we include a figure that is well below 5 million tonnes, Ofgem will set that as the maximum to which it is prepared to go in, as it would see it, distorting the market. 
 The Minister boldly said that he wanted to be aspirational, but the energy efficiency plan for action refers to the announcement of a new aim of delivering savings of 4.2 million tonnes. The figure is already aspirational and is about as woolly and floppy as it gets. He is not setting an aim, but following a trend. 
 The Minister made several useful points about the contribution that the commercial and industrial sectors make to energy efficiency savings. I would like to debate that in more depth on another occasion, because it raises very important issues. However, the essence of the debate on clauses 2 and 3 is whether the domestic sector, which is responsible for 30 per cent. of carbon emissions, should have more rigorous carbon reduction targets. The Minister has decided that it 
 should not, and that it should simply follow what current trends predict. That is bitterly disappointing to those of us who believe that a much more vigorous assault on the problem is needed. Whether there are any levers in the legislation will determine whether the regulator takes the problem seriously. The question does not solely, or mainly, concern the sources of energy that we use, but what demand we apply to the system. That is particularly true of the domestic sector, where efficiency of use is at least as important as the nature of the supplies that are delivered to it. 
 We seek to retain clause 3 as well as clause 2, and if the hon. Member for Milton Keynes, North-East is inclined to press new clause 9, we shall support that too. I recognise that the Minister has done his best and has made moves in the right direction, but it is difficult to see any progress. We think that coal mine methane is a sensible addition to the list, and we hope to proceed on that basis with either an amendment to clause 2 or with an amended new clause 7. 
 This has been a disappointing debate; I do not believe that the Minister has substantially answered my earlier charge that he misled the Committee by saying that new clause 7 is a proper substitute for clauses 2 and 3. The opportunity has been missed.

Jonathan Sayeed: Order. The hon. Gentleman cannot say that the Minister has misled the Committee. Does he wish to withdraw that statement?

Andrew Stunell: I allowed my enthusiasm to run ahead of my propriety. I apologise to the Committee and the Minister.

Jonathan Sayeed: Is the statement withdrawn?

Andrew Stunell: Unreservedly. It is particularly unfortunate that I said that, because I have a high regard for the Minister, whom I know tries his best to give the Committee the information that he feels that we should have and to ensure that it is accurate. I therefore apologise. None the less, perhaps the remark was a measure of how disappointed and concerned my colleagues and I are that an important opportunity for what is supposed to be a Bill that will set policy for the next decade, and possibly after, has been missed. We shall seek to divide on clauses 2 and 3.

Laurence Robertson: On a point of order. Mr. Sayeed. I said earlier that the amount of electricity derived from nuclear sources would be down to 2 per cent. in 10 years. I apologise, but I should have said 20 years.

Stephen Timms: Further to that point of order, Mr. Sayeed. The proportion of electricity derived from nuclear sources by 2020 will be about 7 per cent.

Laurence Robertson: In 20 years—by 2024—it will be 2 per cent.

Desmond Turner: I am grateful to my hon. Friend the Minister for accepting the principle that there is a huge, clear distinction between the development of a machine or technology and its deployment. For instance, the
 Army could have the most magnificently developed tank in the world but if it is sitting in a garage in Aldershot, it will not fight any wars until it is deployed.
 I am happy with the Minister's assurance that he is prepared either to table or to accept an amendment on Report. I hope that he will resist any blandishments from his departmental lawyers trying to tell him that there is no difference between development and deployment. Lawyers are always wrong, and it is nice to serve on a Committee that is not dominated by lawyers. If there are any here, I shall say it again: lawyers are usually wrong. Given the Minister's helpful response, I beg to ask leave to withdraw the amendment. 
 Amendment, by leave, withdrawn. 
 Motion made, and Question put, That the clause stand part of the Bill:—
The Committee divided: Ayes 8, Noes 10.

Question accordingly negatived. Clause 3Annual report on energy efficiency

Clause 3 - Annual report on energy efficiency

Motion made, and Question put, That the clause stand part of the Bill:—
The Committee divided: Ayes 8, Noes 10.

Question accordingly negatived.



Clause 4The Nuclear Decommissioning Authority

The Nuclear Decommissioning Authority

Question proposed, That the clause stand part of the Bill.

Norman Baker: I hope that it is appropriate to make general comments about the proposal to establish the Nuclear Decommissioning Authority as that will enable me to curtail future comments on later amendments. The good news is that the Liberal Democrats believe it right—indeed, long overdue—to establish such a body. There is a need to assess the amount of time, effort and money to be devoted to the decommissioning of nuclear facilities and the onward transmission to waste disposal. I also welcome the Government's statement, in their document, ''Developing a Framework For Stakeholder Engagement and Transparency for the Nuclear Decommissioning Authority (NDA)'', that it is important to establish
''the credibility of the NDA as a body which can deliver and will make a difference.''
 The establishment of such a body throws into sharp relief the costs of decommissioning, which at £48 billion will be £8,000 for every man, woman and child in the country. Although this debate is not about new nuclear build, those who advocate it may wish to consider the cost to date of the nuclear industry for every person in the country.

Laurence Robertson: The hon. Gentleman is right to suggest that the past record of the nuclear industry has left a cost legacy. However, does he accept that, with changed technology, those costs would not necessarily be repeated?

Norman Baker: That is an interesting hypothesis, which we have heard over several decades from the nuclear industry, but it has invariably proved to be wrong. Perhaps one day it will be right, but I have seen no evidence for that and would not take the chance. I want to stress that in making these comments, I am not making the argument for or against new nuclear build. I want to address my remarks to the decommissioning challenge.
 The first thing to do is establish exactly how independent the nuclear decommissioning authority would be. The Government's framework document refers to the need for transparency, but there are several important relationships with the NDA that are not entirely clear. Before we go into the detailed clauses in chapter 1 of part 2, it would be helpful if the Minister commented on that. 
 For example, it is not entirely clear what the relationship will be between the NDA and the parts of the nuclear industry that continue to be actively involved in generation, such as BNFL and, to take a private sector example, British Energy. We know that the NDA will be situated in Cumbria, which is a welcome development as it will protect jobs up there. That was discussed on Second Reading by the local Member of Parliament, the right hon. Member for 
 Copeland (Dr. Cunningham), and we all agree that there is a need to ensure that the skills and knowledge base in Cumbria are not lost and that we have an opportunity to protect jobs in a positive way. 
 That is not in dispute, but the NDA will be literally across the road from people from whom it is receiving material and locations to be decommissioned. In those circumstances, it is important that the NDA is not only independent, but seen to be independent. The authority is a good concept. I hope that it succeeds and attracts cross-party support—not just in principle, but in practice throughout its lifetime—but if it is to do that it needs to be independent. Any suggestion that it could be used to bolster the nuclear industry would be unhelpful. It has a function entirely separate from nuclear generation, and irrespective of one's views on nuclear generation, the NDA should have that separate role and not be used either to attack or to support nuclear generation. It should have a discrete role, and it is important that it is constructed so that it is seen to have that. 
 There are real issues as to the independence of the NDA. Will the Minister tell us who will give it direction? The Bill, unless I have misread it, is rather vague on that. Will direction be the sole responsibility of the Secretary of State, or will the industry have a hand in determining how it is governed? That is an important point of principle. My hon. Friends and I believe that there should be an arm's-length relationship between the NDA and the industry. I do not want to speak for the Conservatives, but I imagine that their amendments will propose a different view, so this is an important principle to establish. 
 The relationship between the NDA and Nirex, which is the great unspoken body in the Bill, is also unclear. Nirex has a responsibility for long-term waste disposal—I do not like the word ''disposal'', because this material remains active for a huge number of years—but clause 6 gives the NDA some responsibility for disposal. Will the Minister clarify what the relationship will be between the NDA and Nirex? Will the NDA's disposal responsibilities be limited to low-level waste, as I believe they should be, or will it have a function on intermediate and high-level waste? 
 I hope that you agree that this is the best time to raise these questions, Mr. Sayeed. It is important that when we agree to the establishment of the NDA, we understand what we are agreeing to. The issues are fundamental and they will determine whether the NDA will work. 
 It is important also that the NDA has an overriding principle, so that people are clear about its primary function. I believe that it should be to protect human health and the environment, but that is not stated in the Bill. Will the Minister clarify what he believes to be the primary duty of the NDA? The lists of responsibilities in clause 6 and general duties in clause 12 do not meet that challenge. 
 I do not want to take too much time at this point, but there are a number of questions about the NDA. There is also the question whether it will be a nuclear 
 generator or simply a decommissioner. Cross-reading clauses 6 and 12 seems to imply that the NDA can be empowered to continue to generate nuclear waste and nuclear electricity, and even—possibly—to build new nuclear generation stations if that is deemed necessary to carry out its ''functions''. It could continue to generate plutonium and, in other words, it could become the opposite—

Jonathan Sayeed: Order. The hon. Gentleman is straying from the clause and trailing some of his amendments. I would be grateful if he confined his remarks to the clause.

Norman Baker: I am trying to help the Committee by questioning the principles behind the establishment of the NDA. I want to find out exactly what the Minister intends. I have no wish to trail my amendments, as you succinctly put it, Mr. Sayeed. I have raised issues that are germane, although I will not go into them in great detail. The establishment of the NDA is a positive step, but it needs to be transparent and independent; it needs to deal with waste, not generate it. Those are the assurances that I seek from the Minister.

Desmond Turner: I strongly support the principle of setting up the NDA, but I would like clarification on two points. The hon. Member for Lewes (Norman Baker) is getting into complex and unnecessary ground when he tries to separate responsibilities for high-level, intermediate or low-level nuclear waste. I find that strange. Clearly the NDA should have responsibility for all nuclear waste. If it deals with a nuclear generating station that has just finished working, all those categories of waste will be involved.

Norman Baker: Of course the NDA has responsibility at that point, but we must consider the question whether it retains responsibility or whether responsibility transfers to Nirex. That is not clear in the Bill.

Desmond Turner: I was coming to Nirex. I put it to the Minister that responsibility should always rest with the NDA. It may choose to delegate it to a contractor under its supervision, but it should still remain responsible. I want him to confirm that point, if I am correct. What relationship is proposed between the NDA and Nirex?

Laurence Robertson: That final point, which was raised by the hon. Member for Lewes a few minutes ago, is important. According to a written answer,
''the Government are giving consideration to the future of Nirex. It will only be possible to set out definitively the relationship between Nirex and the Nuclear Decommissioning Authority once this consideration has been completed.''—[Official Report, 10 March 2004; Vol. 418, c. 1506W.] 
I hope that that consideration has been completed and that the Minister can tell us about it. It is important to establish what that relationship will be. As the hon. Member for Lewes said, it is also important to establish what the relationship between the NDA and the industry will be. I do not want to speak too much on that because I have tabled relevant amendments to later clauses. 
 We welcome the creation of the NDA. Successive Governments have undoubtedly ducked the nuclear waste issue, which is unfortunate and need not have been the case. Just last December, I had the pleasure of visiting Finland to see what that country does with its nuclear industry. It is building a fifth reactor, which is not disproportionately costly, and has made some interesting arrangements. Perhaps we can return to that. 
 The important point is that the Finns are also dealing very effectively with waste. They have one underground repository for low-level and medium-level waste, and are building a second for dealing with high-level waste. When one considers how efficiently and cleanly they are dealing with that and what a small surface area is taken up, one wonders why we in the UK did not deal with these matters as effectively and efficiently. That is to be regretted, but I welcome the fact that the issue is finally being addressed. 
 We have already expressed many concerns about how the NDA will be formulated, how it will work and what relationships it will have. In principle, however, it is good that it is being set up. There is a great deal for it to do and it has many issues to deal with, which we will discuss later. However, we support the clause.

Michael Weir: I shall be brief. I also welcome the setting up of the NDA, but I share many of the reservations expressed by the hon. Member for Lewes about the questions that are still to be decided. Given your strictures, Mr. Sayeed, I will not discuss matters relating to later amendments, but I make the serious point that the NDA must be seen to be totally independent of the nuclear industry. We would all agree that the nuclear industry has had problems with the disposal of waste and with keeping records of what is in the waste dumps in the UK. If we are to tackle the nuclear legacy once and for all, we must ensure that that is done independently and transparently.
 The problem of the nuclear industry may be summed up by the fact that, 18 years after Chernobyl, there are still hill farms in Scotland where the sheep cannot be moved because of the high levels of radiation that they suffered—that is all those years after a radiation cloud from Russia came over the UK. That is a measure of the problem that we face—it is not specifically a waste problem, but it is similar. 
 When I raised questions about the nuclear industry and future energy generation by the NDA during the last sitting of the Committee, my concerns were rubbished by the Minister. However, there are serious problems with how the Bill has been phrased in those respects. I reiterate the point that if the NDA is not seen as completely independent and as an organisation set up to deal with waste rather than to generate electricity, it could lose public support and run into difficulties.

Stephen Timms: I am pleased by the warm and wide welcome for the creation of the NDA, which has been reflected in the speeches.
 Clause 4 simply provides for the establishment of the NDA as a body corporate and sets out its status. The NDA will be similar to most other non-departmental public bodies in that it will not act on behalf of the Crown—except in one specified circumstance, which we will discuss when we reach clause 10—and will not, therefore, enjoy any corresponding status, immunities or privileges. 
 In November 2001, the intention to create such a body was announced, and that was elaborated on in the 2002 White Paper. The creation of the NDA reflects the fact that there is a large technical and managerial challenge that needs to be met to deliver the necessary clean-up. It also reflects the Government's determination, through competition, to ensure that the best available skills and experience from the public and private sectors are brought to bear on the issue, and makes it clear that our priority is safe, secure, cost-effective clean-up that protects the environment—an important part of what the NDA must achieve. The creation of the NDA also reflects our desire for the management arrangements for clean-up work to be open and transparent and to command public confidence. 
 I hope that one of the benefits of the creation of the NDA will be to dispel some of the aura of mystery and secrecy that has surrounded the nuclear industry, which has been detrimental to the industry and to those who wanted to know more. 
 We shall return to many of the points raised in the debate when we discuss later amendments. I entirely agree that the NDA should be seen to be independent. It will be subject to ministerial oversight in the usual way; it will operate openly and transparently and consult on its plans. Its annual report and accounts will also be subject to the usual NDPB arrangements for public scrutiny. I believe that it will achieve the necessary independence, which I agree is important. 
 The NDA will have responsibility for securing the decommissioning and clean-up of designated sites, at which site operators will have to develop work plans to meet the NDA's objectives, subject to regulatory requirements; the NDA will fund those operators. The NDA's primary duty will be to drive forward clean-up and it will have to operate within the existing regulatory framework. The other things that it might do will be subject to the overarching obligation to clean up.

Anne McIntosh: Will the Minister explain how the NDA will function within the regulatory framework as it applies to Scotland? Page 15 of the regulatory impact assessment states that the clause is subject to the agreement of the Scottish Parliament, a point that we can explore in the context of the amendments to clause 5. The Minister said that the proposal would go through speedily, but I wondered at what point it would be considered by the Scottish Parliament.

Stephen Timms: As the hon. Lady said, we will consider that issue in a moment. There is devolution to Scotland on these matters, which must be reflected in the Bill and in the way that the arrangements are made.
 The relationship with Nirex was raised. We are still considering its future, and the review is not yet complete. My right hon. Friend the Secretary of State for Environment, Food and Rural Affairs announced in July that Nirex would be made independent of industry and subject to greater Government control. We are considering the means of securing that objective, and we will announce the outcome of the review as soon as it has been completed. 
 The NDA will carry out the responsibility for directing the work of its site operators; it could also be given responsibility for constructing and operating disposal facilities. It will be responsible for dealing with hazardous material at its sites—treating, storing, transporting or disposing of low, intermediate and high-level waste. That involves the full range of material, as my hon. Friend the Member for Brighton, Kemptown suggested. The Bill provides for the NDA to be given responsibility in designated circumstances for dealing with hazardous material not at its sites. It will set out its plans for waste management in its five-year strategy and annual work plans. 
 I am pleased that the establishment of the NDA has been welcomed. It is a good step forward in dealing with a big problem that will have to be dealt with for many decades, and we shall consider the details in a moment. I commend the clause to the Committee. 
 Question put and agreed to. 
 Clause 4 ordered to stand part of the Bill.

Clause 5 - Constitution of NDA

Norman Baker: I beg to move amendment No. 76, in
clause 5, page 3, line 12, at end insert—
 '(1A) Persons who have held office or been employed by nuclear generators or processors within a six-month period prior to appointment shall be ineligible for membership.'.

Jonathan Sayeed: With this it will be convenient to discuss the following amendments: No. 42, in
clause 5, page 3, line 14, after 'State', insert 
 'after consultation with representatives of BNFL, British Energy, Nirex and the UKAEA'. 
No. 43, in 
clause 5, page 3, line 16, at end insert 
 'and representatives of BNFL, British Energy, Nirex and the UKAEA'. 
No. 44, in 
clause 5, page 3, line 29, at end insert 
 'following the Secretary of State's consultation with representatives of BNFL, British Energy, Nirex and the UKAEA'.

Norman Baker: It is germane to this clause to welcome the vision that the Minister set out in his previous contribution, particularly his recognition that the industry and the NDA must be seen to be separate, and that the NDA must be independent—that is exactly right. The amendment suggests a way of demonstrating to the public that the NDA is separate
 from the industry, as well as giving the assurance that its primary duty—to deal with the decommissioning of facilities and its consequences—is separate from the interests of nuclear generators.
 It is unclear exactly what the NDA's first year programme will be, because we have not discussed that yet. A figure of £2 billion has been bandied about as the money that it will have for the first year. Will the Minister confirm or deny that? In any case, who will determine the spending priorities? It is important that those who are appointed to leading positions on the NDA are separate from the industry so that they can focus clearly and independently on the role that the Minister expects them to fulfil. If people in Cumbria cross the road to join the NDA immediately, there will not be the traditional break that applies to civil servants or Ministers when they take up positions after having been in office. 
 There is a good reason for that break period; it is an essential safeguard. It is a well established Government practice, and the amendment would install it in this context. Without that break, the independence of the NDA could be compromised. More importantly, key personnel appointed to the NDA could come straight from the industry and determine the first year's spending programme. If the spending programme is drawn up by DTI officials, there will be a degree of independence. However, if it is drawn up based on submissions from British Nuclear Fuels Ltd., British Energy or others, we will have to question whether the priorities are right. How the money is spent is important. 
 In the first year, the NDA will enter into contracts—often long-term contracts—with individuals and companies pursuant to its powers and duties under the Bill. If mistakes are made in the first six months or year, they will be difficult to rectify subsequently. One might say—the hon. Member for Southampton, Test (Dr. Whitehead) alleges that this is my conspiracy theory—that those with an interest in the preservation and enhancement of nuclear power would be interested in how the programme is constructed by the NDA. To avoid any suggestion of that, the NDA should be entirely independent. That is what the amendment would secure. I hope that the Minister will support it. 
 The industry recognises that opportunities will arise from the NDA's first year of operation. Only last week, an advert from BNFL appeared in The Parliamentary Monitor that stated: 
 ''The onset of new legislation presents a whole new world for BNFL. This legislation will manifest itself as the Nuclear Decommissioning Authority.'' 
It continued that freedom from restraints, such as historic waste, 
''will allow us to develop commercially and internationally in both government and utility sectors. In short, it's the dawning of a new era for BNFL.'' 
So, it clearly sees an opportunity from the establishment of the NDA. It is matter of Government policy as to whether it is a new dawning for BNFL, but that is separate from the establishment of the NDA. We must ensure that the personnel involved are clearly separate and not helping BNFL with its objective.

Laurence Robertson: The amendments that we have tabled come from the opposite point of view to that expressed by the hon. Member for Lewes. I propose that, before the chairman, non-executive directors and chief executive are appointed, there should be discussions with the industry, and I have specified BNFL, British Energy, Nirex and the United Kingdom Atomic Energy Authority. The NDA will deal with work of the highest importance. Indeed, it is difficult to imagine anything more important in terms of the environment and public safety. The work will be extremely complicated as well as important. In fact, not much is more complicated than the nuclear industry. I am not talking about seeking the industry's permission before making the appointments—that would be wrong—but it would be sensible to seek the advice and opinions of people in the industry beforehand.
 We are involved in setting up yet another body. I do not know whether it officially qualifies as a quango, but we have thousands of quangos. Some are useful and some are not, but it is very important that this body be useful and effective. It would therefore be rather foolish to disregard or reject the advice that may be given by the UKAEA, which has been operating since 1954, and by BNFL, which I understand has been operating for 30 years, if not more. That is the basis of the amendments. They do not suggest that those bodies should have to grant permission, but merely that their opinions should be sought. Given the importance of the work that will be carried out, that is the least that we should expect.

Richard Page: Unsurprisingly, I support my hon. Friend and, regretfully, I disagree with the hon. Member for Lewes. Along with everyone else, I welcome the setting up of this agency. As my hon. Friend said, that is long overdue. It was unfortunate that, in 1997, a geological survey in Cumbria brought a halt to the idea of having a high-level waste disposal facility.
 I understand where the hon. Gentleman is coming from, but he advances an argument that is contrary to the reality of what happens when civil servants leave to go to industry. They take with them knowledge of, and expertise on, Government programmes and policies and what could be happening, and that might give a financial advantage to one company. They have a six-month cooling-off period in which, in theory, the Government move on at such a rate that the expertise and knowledge of those civil servants is completely lost, and then they are supposed to go into a company without giving it the commercial advantage that it would have had had they joined it immediately. I have not yet fathomed how that prevents a civil servant from talking to the company that they are to join in six months' time, but illumination will, no doubt, come at some point. 
 I say to the hon. Member for Lewes that the situation is not as he suggested. It is not about a gamekeeper becoming a poacher—I exaggerate to make the point—but about a poacher becoming a gamekeeper. Is he seriously saying that someone with knowledge of the industry should not be able to join a decommissioning agency immediately so that he can 
 give advice and help to ensure that the work is done as quickly and effectively as possible, but that, unfortunately, the agency should have to hold off for six months before it can benefit from that person's knowledge? That would be completely against the national interest. 
 My hon. Friend the Member for Tewkesbury (Mr. Robertson) made his points with his customary clarity. I am sure that, in an industry as tight-knit as the nuclear industry in this country, the Government and the officials will, in some shape or form, have discussions with people from Nirex, BNFL and so on, because they will be the necessary runners and riders for the posts that are coming along. My hon. Friend wishes to see that point covered in the Bill, so that there will be transparency in the process. I hate to tell the Government that they sometimes operate behind closed doors, but we should like to see the selection process more open and described in the Bill, so that industry knows about the type of people who will become part of the system. Let us have some political honesty and transparency; that is the reason behind my hon. Friend's amendment, which I enthusiastically support.

Michael Weir: I shall be relatively brief. As has been said, the amendments come from two different extremes. I support the view of the hon. Member for Lewes, who said that it is important that the public are confident that the NDA is transparent. If the Conservatives' amendments were accepted, that transparency would be lost. This is a case not of poacher turned gamekeeper, but of showing that we have reached a new stage in dealing with the legacy of nuclear waste.
 To put it bluntly, the nuclear industry has not always been transparent. There has been a culture of secrecy in many areas of it and record keeping in many nuclear dumps has been less than transparent. There is even a degree of doubt about what is in those dumps. Those who set up the dumps are not the same people who work for those organisations now. 
 There is a long history of secrecy in the nuclear industry, and in setting up a transparent and independent agency to deal with that legacy we must ensure that the same people cannot simply cross over to it from the nuclear industry. That is not to say that the NDA will not need technical advice. Clearly it will, and some of those giving advice may come from the nuclear industry. We are talking here about the non-executive directors and chairman of the NDA, and we must ensure that they are not those who ran the nuclear industry in the past.

Richard Page: Can I get this absolutely clear? Is the hon. Gentleman saying that somebody coming from industry, who may have knowledge of procedures that are not up to speed or of radioactive material being stored unsafely, should not take up the job immediately and pass on such information, but should wait six months? I would like him to clarify the point.

Michael Weir: The point I am making is that a new organisation must be seen to be transparent. I am not suggesting that nobody with experience or knowledge should work for it, but we are talking here about the non-executive directors and chairman. They must be seen to be independent and focused on the historical problem.

Stephen Timms: The amendments all propose changes to the arrangements for appointments to the NDA board. As the hon. Member for Tewkesbury said, they point in opposite directions. The hon. Member for Lewes proposes ruling out people who have recently been employed in the nuclear industry from serving on the NDA board, and the points put by the hon. Member for Tewkesbury on that issue have merit. The board will need nuclear skills, so it would be unhelpful to set it out in legislation that the board cannot hire people who are most likely to have up-to-date knowledge. The board will need people with up-to-date expertise and we should not exclude that possibility, as the amendment would.
 Equally, the proposals tabled by the hon. Member for Tewkesbury requiring the Secretary of State to consult existing nuclear organisations before appointing the chairman, chief executive and non-executive directors would also create problems. It is not appropriate to set out in legislation the organisations that should be consulted, particularly when those bodies will derive funding from the NDA. It could put those individuals in a difficult position if they were consulted in the way that he suggests. 
 The Bill proposes that the arrangements for appointments to the board should follow well-established procedures involving the Office of the Commissioner for Public Appointments and that we should be able to establish a fit-for-purpose organisation and preserve flexibility to ensure that it remains fit for purpose over the long period in which we envisage it operating.

Norman Baker: The Minister will not be surprised to know that I find his response to the hon. Member for Tewkesbury entirely convincing and his response to me entirely unconvincing.
 To pick up on one point, of course there will be a close relationship between the NDA and the nuclear industry—it would be difficult to imagine how it could operate without such a relationship. There will be discussions between the NDA and the industry on technical matters relating to decommissioning, and the industry contains important expertise that will have to be listened to, but because that relationship will be so crucial and will have to be so close, the NDA board must be seen to be independent. That underlines the need for my amendment. 
 The Minister recognises that the organisations dealing with the NDA will derive funding from it, but he appears to be happy for someone working in one part of the nuclear industry on a Friday to start working for the NDA the following Monday in a position to hand out large amounts of public money to people who were their colleagues two days before. That situation seems inappropriate, fails the 
 Minister's transparency test and brings into question the independence of the NDA. If he is keen to protect members of the NDA from the allegation that they are in the nuclear industry's pocket, that is not the way to act. 
 I am disappointed by the Minister's response, but I will not press the amendment to a vote. Like several other hon. Members, however, I shall raise at a later stage a number of tests to establish whether the NDA is independent, and I hope that at least some of them will have to be met. Otherwise, his objective as stated in clause 4, which is that the industry and the NDA should be seen to be independent of each other, will fail. I beg to ask leave to withdraw the amendment. 
 Amendment, by leave, withdrawn.

Norman Baker: I beg to move amendment No. 75, in
clause 5, page 3, line 34, at end insert 'and the Welsh Assembly'.

Jonathan Sayeed: With this it will be convenient to discuss the following:
 Amendment No. 119, in 
schedule 1, page 151, line 36, at end insert 'and the Welsh Assembly'.

Norman Baker: There are no Welsh nationalists on the Committee, so I am doing a job for them. That is the flippant point, but the serious point is that there is a need to ensure that within the democratic bodies of this country—this Parliament, the Scottish Parliament and the Welsh Assembly—there is ownership and acceptance of the NDA as it is established. That includes its key personnel. Clause 5 and schedule 1, the latter of which refers to removing people from office, indicate that the Secretary of State should consult Scottish Ministers, but there is no mention of the Welsh Assembly.
 I accept that devolution means that this is a matter for the Secretary of State in England and Wales and for the Scottish Parliament in Scotland, and I accept the logic that led to the current drafting of the Bill, but I hope that the Minister accepts that the Welsh Assembly has a legitimate interest in how matters are progressed. 
 At important junctures in the NDA's life, including the appointment and removal from office of key personnel, it would be appropriate to take soundings from the Welsh Assembly. My amendment suggests not that it should be given a power of veto, but simply that, as a matter courtesy and involvement, it should be consulted. That does not seem unreasonable.

Michael Weir: I want briefly to support the amendment. We do not have a Welsh nationalist here, so a Scottish one is near enough. On the face of it, there is consultation with Scottish Ministers, although I would have much preferred agreement, but there we go. The hon. Member for Lewes is right to say that the devolution settlement is different in Wales. He is also right to press this matter, especially as the Richard commission is considering extending the powers of the Welsh Assembly. It may well have these powers—in the not too distant future, I hope.

Stephen Timms: Hon. Members make the point that the exercise of functions under nuclear legislation differs between Scotland and Wales. In Scotland, some functions under the Nuclear Installations Act 1965 have been transferred to Scottish Ministers. Others were made to be exercisable in Scotland only after consultation with Scottish Ministers. In addition, the protection of the environment and the management of radioactive waste are devolved to Scotland. The hon. Member for Vale of York asked where we have got to on the procedures involving the Scottish Parliament. The Sewel motion has been passed and the Scottish Executive have agreed provisions that give Scottish Ministers powers of joint action on consultation rights that are appropriate to the devolved settlement on nuclear matters.
 The position is different for Wales because much less has been devolved. Welsh Assembly officials were consulted during the preparation of the Bill, but they did not request that the Assembly should have powers under it. That is not surprising. There is little impact on devolved responsibilities in Wales. If something arose in the operation of the NDA that had an impact, the Welsh Assembly would obviously be consulted. I do not think it necessary to include that in the Bill or to incorporate the amendment relating to consultation on appointments. I hope that the hon. Member for Lewes will not press the amendment. The balance in the Bill correctly reflects the different responsibilities in Scotland and in Wales.

Norman Baker: I am happy to have raised the issue. I hear what the Minister says and I beg to ask leave to withdraw the amendment.
 Amendment, by leave, withdrawn. 
 Clause 5 ordered to stand part of the Bill.

Schedule 1 - The Nuclear Decommissioning Authority

Laurence Robertson: I beg to move amendment No. 45, in
schedule 1, page 151, line 11, leave out 'five' and insert 'three'.
 The amendment would reduce the appointment time of the chairman and non-executive members from five years to three. While I would be the first to recognise that we can argue for ever more about how many years it should be, I felt that five might be somewhat excessive, especially for a completely new organisation. I would welcome the Minister's comments and perhaps an explanation of why he feels that five years is appropriate at this point in the cycle.

Stephen Timms: The hon. Gentleman makes an interesting point. The NDA has a particularly long-term task. It will conclude contracts for the clean-up of its sites, which will be long-term contracts of about five years, with options for renewal. In that light, it makes sense to provide for similar continuity in the make-up of the NDA board. The Office of the Commissioner for Public Appointments allows for appointments to extend for up to five years. It is appropriate for NDA appointments to be able to be extended to that
 maximum length, although the provision does not preclude briefer appointments if those were appropriate in particular circumstances.
 The hon. Gentleman makes a fair point about the organisation being at its very beginning. It is likely that there will be different periods of service for people appointed to the board right at the start, if only to avoid wholesale change in its composition after the first terms are concluded. However, it is appropriate to allow for appointments of up to five years. 
 Renewal of NDA appointments is also provided for in the Bill, but we have made it clear that we will follow the guidelines of the Office of the Commissioner for Public Appointments, which allow for one reappointment and a maximum length of service of 10 years. Justified exceptions can be made, and we want to preserve that flexibility in case it is needed. 
 The points made by the hon. Gentleman are fair, but given the long-term nature of the task that the NDA faces and the contracts into which it will enter, five years is a sensible point at which to set the term.

Laurence Robertson: I am grateful to the Minister for his explanation. He makes a good point about the long-term nature of the work that the NDA will undertake and the consequent long-term nature of the NDA itself. I am happy to accept his advice on that matter. However, I am slightly concerned that he says he will follow the guidance on public appointments. I think he said that it is likely that there will be scope for only one reappointment and a maximum term of 10 years.

Stephen Timms: Except in exceptional circumstances. That is the norm.

Laurence Robertson: I am grateful to the Minister for that clarification. Paragraph 1(3) of the schedule states that
''a person is eligible for re-appointment (on any number of occasions)''. 
There is therefore a slight discrepancy. There is an inconsistency between the Minister saying that he does not envisage an appointment continuing for longer than 10 years and the statement that people could be eligible for reappointment 
''on any number of occasions''.

Stephen Timms: I am grateful to the hon. Gentleman for allowing me to clarify that matter. The legislation allows for extensions, as he suggests, but the Government's practice will be to conform with the guidance of the OCPA, which normally allows for two terms with the possibility of a further extension in exceptional circumstances. The legislation must allow for such extensions, but the Government will apply the OCPA guidance.

Laurence Robertson: I am grateful to the Minister for that explanation, which is now on the record. It might have been better to re-word paragraph 1(3) to reflect it and perhaps to say that an appointment would be for two terms, except in exceptional circumstances. That would have been clearer and more transparent.
 However, I do not wish to extend the debate and therefore I beg to ask leave to withdraw the amendment.
 Amendment, by leave, withdrawn.

Laurence Robertson: I beg to move amendment No. 46, in
schedule 1, page 152, line 5, at end insert
'following consultation with the Chairman of the NDA'.

Jonathan Sayeed: With this it will be convenient to discuss the following amendments: No. 103, in
schedule 1, page 152, line 11, leave out sub-paragraph (3). 
No. 49, in 
schedule 1, page 154, line 9, at end insert— 
 'Limit on employment costs 
 6A The total cost of employment of executive and non-executive members of the NDA, including pensions, allowances and gratuities, shall not exceed £750,000 in the first year of its operation, to be increased in line with inflation each year thereafter.'. 
Mr. Robertson: Amendment No. 46 is, in a sense, circular. It refers to paragraph 2, under which the NDA may pay to the chairman and to each of the non-executive members 
 ''such remuneration and allowances as the Secretary of State may determine.'' 
It might therefore seem slightly odd to require the Secretary of State to consult the NDA about what it pays the chairman and the non-executive members, but I think it has been worth tabling the amendment. 
 Amendment No. 49 is more important, as it would place a limit on the employment costs of executive and non-executive members of the NDA. The Bill is in danger of creating a body with a great many highly paid people. The amendment therefore provides that the total cost should not be more than £750,000. We could argue about that figure, but I believe it is reasonable, although the Minister will probably say that there should be no figure at all. 
 What bothers me is what can be paid to executive and non-executive members. Apart from salaries, there are pensions, allowances and gratuities. I am concerned that the cost of running the organisation at senior level should not be allowed to run away. Briefly, I would welcome the Minister's explanation of how the cost of the NDA board will be financed. What percentage will it take of the running costs?

Stephen Timms: I think the proportion will be small. We expect the NDA's long-term programme to cost about £50 billion. In that context, the amounts of money we are discussing are quite small. However, I share the hon. Gentleman's concern to ensure the efficient and effective use of public resources.
 Like other non-departmental Government bodies, the NDA will have to justify its administration expenses in its annual plan, which the Secretary of State has to approve each year. It does not make sense to impose a limit of £750,000 on the cost of the board. Even if that figure was right now, it is likely that it will 
 not be right in future. As I said, the authority's remit will extend for many decades, so the Bill stating a figure would be unhelpful. 
 As the hon. Gentleman said, it is odd to provide for a statutory consultation of the chairman for the chairman's own terms and conditions. Like the pay and allowances of other non-executive members, they should be a matter for negotiation between contracting parties rather than for statutory consultation, as amendment No. 46 provides. This is a matter of applying the normal arrangements that apply to public bodies. 
 Amendment No. 103 would remove the option for compensation to be paid to non-executive members should the Government wish to remove them before the conclusion of their term. It would be very unusual to rule out in statute the normal operation of existing contractual and employment law, which governs relationships between employer and employee. 
 On the hon. Gentleman's general point, I understand the anxieties often expressed about arrangements such as the seemingly over-generous golden parachutes, and I understand and share the concern about some practices that are applied elsewhere. We certainly do not want to enter into unnecessary obligations to pay compensation. The balance that we have struck in this part of the Bill reflects arrangements that apply elsewhere. 
 The hon. Gentleman asked about the NDA's running costs: we estimate that they will be between £25 million and £30 million a year. The board's costs on commencement are likely to be between £750,000, which he proposes, and £1 million.

Laurence Robertson: I thank the Minister for that response. His last sentence won me over, so to speak, because he concluded that the figure I proposed—about £750,000—is not too ridiculous. Given his sympathetic remarks on the need to control costs at the top of the organisation, I beg to ask leave to withdraw the amendment.
 Amendment, by leave, withdrawn.

Norman Baker: I beg to move amendment No. 125, in
schedule 1, page 154, line 11, at end insert—
'Public annual general meeting of the NDA
 6A (1) The NDA shall make arrangements for a general meeting of the NDA to be held in public during the course of each calendar year. 
(2) The NDA shall take all practicable measures to ensure that members of the public with an interest in the activities of the NDA are given reasonable notice of the meeting held in accordance with the provisions of sub-paragraph (1).'.
 I mentioned three tests that I am seeking to apply to the NDA: transparency, independence and the reduction of the waste problem. The Minister appeared to sign up to those objectives when he talked about clause 4, and I hope that I can offer him many opportunities to show that he intends to adhere to them. Here is another one involving transparency. 
 Like the hon. Member for Tewkesbury, I am unsure whether the NDA is officially a quango, but it is quite normal for quangos to hold one meeting every year in 
 public as a sign of public accountability. The Minister will be aware that the theoretical line of accountability through the Secretary of State may satisfy constitutional propriety, but it does not necessarily meet those tests in reality. If he wants the NDA to be transparent, the amendment is a clear way to achieve that objective. 
 It is entirely uncontentious to ask the NDA to meet once a year, as such a meeting would offer an opportunity to present its programme, reflect on the work that it has done during the year, take questions and generally be accountable to the press, the public and Members of Parliament. Of course, we all accept that confidential matters, such as contractual arrangements, will occasionally arise, and it is normal in meetings for such items to be dealt with differently. There are no objections to that because confidentiality can be protected. It is sensible for the proposal to be taken further and I look forward to the Minister's positive response.

Laurence Robertson: I rise briefly to support the hon. Gentleman's amendment. One problem that the nuclear industry has perhaps had in the past—reference was made to it this morning, although I cannot remember which Member used this word—was its mystique. As we move forward and clean up various operations, the NDA must be seen to be transparent and work with members of the public. I cannot think what objection there should be to the amendment, but I am sure I am about to hear it from the Minister.

Stephen Timms: The White Paper made the point that the NDA should champion openness and transparency, and that it should help to dispel what I referred to earlier as the aura of mystery and mistrust, which has been so damaging to the nuclear industry's reputation. It will be important for the NDA to win public confidence through regular engagement with interested parties and communities, and we have made explicit provision to achieve that.
 Clause 15(3), which we will come to later, requires the NDA to set out its objectives for stakeholder engagement in its strategy. That provision was added following comments on the draft legislation during a good process of consultation. When consulting on its strategies and annual plans, the NDA is also required to have regard to any representations made by the public, while its strategies, annual plans and annual reports will all be published, subject to appropriate exclusions. In the DTI, we have also been preparing a stakeholder engagement framework, which has been developed out of the two rounds of regional events that have taken place in the last year. The NDA will take on that framework, and develop and maintain it. 
 I completely agree with the concern to see that the NDA conducts itself openly and transparently to secure the public's confidence. However, it is also important that it has the flexibility to decide how best to fulfil its remit and deliver on its objectives more widely. Paragraph 10 of schedule 1 explicitly provides for the NDA to have flexibility in deciding its own procedural arrangements. Nothing in it rules out the 
 possibility of a public annual general meeting, but I believe that we can leave the NDA to make such decisions for itself. For example, the NDA may decide that it would be better to have several smaller, regional meetings rather than the one meeting that the amendment envisages. 
 Those outside the House will see from the record of our deliberations our general agreement on the desirability of arrangements along the lines of those set out in the amendment, although the question whether the NDA chooses precisely that or something else can be safely left with it. It will be essential that the NDA promotes a strong sense of public interest in, awareness of and confidence in what it is doing. Meetings of various kinds will help to achieve that.

Norman Baker: When the Minister began and talked about championing openness and transparency and dispelling the aura of mistrust, I thought, naively, that he might be prepared to accept my amendment. He was certainly speaking along those lines. In the end, however, we have had every possible assistance short of actual help, although he has suggested that the amendment is jolly good without being one he can accept.
 The Minister mentioned regional meetings, and it would be possible for the NDA to arrange such meetings under clause 15(3). Nothing in my amendment would preclude that, so his point is something of a red herring. However, I suppose that him saying that he agrees with the principle—or words to that effect—is as close as I am going to get to having an amendment accepted by the Government. 
 I look forward to the operation of the NDA, although it would have been helpful for the amendment to be accepted. It would not have tied the NDA's hands and prevented it from undertaking the consultation and achieving the openness that it wanted. A public AGM is normal practice, which is why I tabled the amendment in such terms, but in the light of the Minister's comments I beg to ask leave to withdraw the amendment. 
 Amendment, by leave, withdrawn. 
 Question proposed, That this schedule be the First schedule to the Bill.

Anne McIntosh: I would like to have a small bet on schedule 1 standing part of the Bill.
 I should declare a small interest, as the first constituency I fought was Workington in 1987. I was not as successful as my hon. Friend the Member for South-West Hertfordshire (Mr. Page), who represented Workington for the Conservatives in 1976. To paraphrase the Minister, the year 1987 falls somewhere between the Gas Act 1986 and the Electricity Act 1989. 
 Schedule 1 adds meat to clause 5, and I was taken by the information, which we received from the Minister in response to my earlier query, that the Sewel motion has been passed, allowing for joint action under a devolved settlement on nuclear matters. I want to press him further and ask under which particular legislation 
 that joint action has been agreed, as there seems to be a discrepancy as regards what energy matters are devolved to Scotland or reserved under existing law. 
 Under the Scotland Act 1998, all matters of regulation, apart from water, are reserved and therefore outside the competence of the Scottish Parliament, whereas under section 3 of the Electricity Act 1989 such matters are devolved to the Scottish Parliament. I am not familiar with energy matters relating to Scotland, so I have relied on a book by Cosmo Graham, ''Regulating Public Utilities: A Constitutional Approach'', which explores the subject in detail. Will the Minister tell us which legislation he is relying on, particularly with respect to nuclear energy? 
 According to paragraph 1(8) of schedule 1: 
 ''Before exercising his power under sub-paragraph (6)'', 
which refers to removing the chairman or a non-executive member from office, 
''the Secretary of State must consult the Scottish Ministers.'' 
Has that also been agreed under the Sewel motion, or is it yet to be considered by the Scottish Parliament? 
 According to the regulatory impact assessment, the agreement of the Scottish Parliament is required. The NDA will have functions that relate to reserved and devolved matters, so it will have a similar status to a cross-border authority. What other cross-border authorities exist in the energy field? Schedule 1 sets out responsibilities that Scottish Ministers will have in relation to the operation of the NDA and to the arrangements to ensure the accountability, where appropriate, of the Scottish Parliament as well as Westminster. 
 Page 16 of the regulatory impact assessment states: 
 ''Expectations are that the establishment of the NDA will lead to cost efficiencies over the medium to long term.'' 
The Minister informed my hon. Friend the Member for Tewkesbury that the annual running costs will be about £25 million to £30 million a year, with salary costs of £750,000 to £1 million a year. Schedule 1 sets out most of the NDA's set-up and operational costs, so where will the medium to long-term savings be made? 
 According to page 17 of the RIA: 
 ''Primary legislation is required to set up the NDA to exercise statutory powers in respect of managing public sector nuclear liabilities and to provide a publicly accountable body subject to Parliamentary scrutiny for the spending of £50 billion plus of public money over the next 60-100 years''. 
That is a firm commitment that the spending will be £50 billion plus. How does that compare with what the running costs of BNFL would have been? Would the costs cover the need 
''to facilitate, if necessary, the transfer of assets vested in BNFL by the Atomic Energy Authority Act 1971 out of BNFL and otherwise enable restructuring of the company to take place''? 
It would be helpful if the Minister shared that information with the Committee.

Stephen Timms: Sadly, I have not had the opportunity to read the splendid book to which the hon. Lady drew the Committee's attention. Essentially, the arrangements that I referred to, which are reflected in the drafting of the legislation in respect of Scotland,
 were put in place under the Scotland Act 1998 when powers were devolved to the Scottish Parliament concerning parts of the Radioactive Substances Act 1993 and the Nuclear Installations Act 1965, which I mentioned. There is more detail about exactly what will happen in Scotland in clause 9, which we shall come to shortly. If the hon. Lady needs more detailed information on that topic, she can drop me a line and I will ensure that it is promptly provided.
 The hon. Lady raises the question of where the savings are going to come from. I anticipate that the largest savings will arise from the introduction of competition to the selection of site operators, which is a core part of what the NDA can achieve. Evidence from the United States shows that substantial savings can be achieved by introducing such competition. We would expect to realise that objective. Precisely how great those savings will be is a matter for speculation, but they are likely to be significant given the large scale of the public spending—£15 billion—that we expect over a long period. Given the scale of that budget, quite modest percentage savings will add up to a lot of money. The creation of the NDA will be a helpful step in realising them.

Anne McIntosh: I am grateful to the Minister for his comments. I was quite specific, and perhaps we can explore the matter further under clause 9. It would appear that there is some discrepancy. I do not want to detain the Committee for long, but the Scotland Act 1998, to which the Minister referred, is specific on the point that all matters of regulation are reserved. I am not completely satisfied on that point, but we can explore it further in the context of clause 9.
 Question put and agreed to. 
 Schedule 1 agreed to.

Clause 6 - Designated responsibilities

Norman Baker: I beg to move amendment No. 104, in
clause 6, page 4, line 11, at end insert
'and for a period of 12 months only in the case of any nuclear installation'.

Jonathan Sayeed: With this it will be convenient to discuss the following amendments: No. 109, in
clause 12, page 10, line 18, at end insert 
 'consistent with the objective of decommissioning any operating plant at the earliest practical point'. 
No. 112, in 
clause 13, page 11, line 7, at end insert 
 'for a maximum period of 12 months'.

Norman Baker: The Minister has told us about transparency and independence, so let us try him on the question of the NDA not generating excessive waste. I was interested in the Government's White Paper, which promised an annual report on the rationale for keeping open nuclear facilities, but that seems to have mysteriously vanished between the publication of the White Paper and the Bill. We are
 used to party manifestos having policies of storm quality, which become heavy rain on reaching a White Paper and light drizzle in a Bill. That is what we have in this case—a welcome suggestion has disappeared in the mysterious period between the production of the White Paper and the Bill.
 The matter is at the heart of the NDA's function. I naively thought that the NDA is there to help to deal with the environmental mess that the nuclear industry has created over many years and that its function is to decommission facilities and ensure that decommissioning is dealt with safely and sensibly, consistent with the good use of taxpayers' money. That seems to be the functions of the NDA put simply. 
 However, that is not what the Bill says, and I want to know why. For example, clause 6 says: 
 ''The principal function of the NDA shall be to have responsibility for securing — 
 . . . the operation, pending the commencement of their decommissioning, of designated nuclear installations''. 
The phrase that I am keen for the Minister to explore is 
''pending the commencement of their decommissioning''. 
Under the system, when a nuclear operator decides that its facility is to close—or, for whatever reason, the Government decide that it should be closed—the facility should become redundant and be handed over to the NDA to be dealt with. It is odd if something that has been handed over to the NDA can continue operating indefinitely, which is how I read clause 6. That is reiterated in clause 13(2), which says that the powers of the NDA include, in particular, the 
''power to operate electricity generating stations''. 
Why is no limit being put on the time for which the NDA would have that responsibility? Why is there not an annual reporting mechanism, as the White Paper proposed? 
 Does the Minister accept that the Bill as drafted would, in theory, enable the NDA to continue to generate electricity from those nuclear stations indefinitely? I am not sure that I can imagine the circumstances in which that would arise; nevertheless the Bill would muddy the waters between the NDA's finances and those of the nuclear industry, which generates electricity and waste. It also leads to an odd situation in which the NDA, which is responsible for dealing with our waste mountain, would, rather perversely, end up having to generate its own waste because it would be operating stations that produced waste. 
 As I understand it, clause 6 allows BNFL's ageing loss-making Magnox reactors to be operated by the NDA, apparently without time scale. It also gives the NDA power to operate the two reprocessing plants at Sellafield. We will come on to reprocessing as an aside in the next group of amendments, but suffice it to say that it would be very curious for a body designed to deal with nuclear waste to be the primary production method of that waste. That is the effect of clause 6 as I see it. Why do we not have a time limit on the operation that the NDA would be able to set for 
 stations that come under its control? That is the primary question that I hope the Minister will address in responding to the amendments.

Colin Challen: I rise to seek further clarification on the first two sentences of clause 6, (1)(a) and (1)(b). First of all, I recollect that, on Thursday, my hon. Friend the Minister said that:
''the NDA's running of power stations will be limited, in the nuclear case, to the Magnox situation''.—[Official Report, Standing Committee B, 20 May 2004; c. 39.] 
That is an existing situation. I want to be absolutely clear that the clauses will not empower the NDA to start decommissioning future new build power stations. It does not seem entirely clear that the clauses limit the NDA's responsibilities to Magnox power stations, especially as clause 6(1)(b) refers to: 
''decommissioning of those and other designated nuclear installations''. 
Will the Minister clear up that those responsibilities will be limited to extant nuclear installations?

Michael Weir: I appreciate what the last speaker said. Later amendments will seek to achieve the same thing by a different route, because of the serious concerns that the NDA will, in effect, become a nuclear generator. Clause 6(1) says
 ''The principal function of the NDA shall be to have responsibility for securing— 
 . . . the operation, pending the commencement of their decommissioning, of designated nuclear installations''. 
It is clear that it has the power to continue operating those stations. There is nothing in the Bill as it stands to say on what time scale those stations will be operating or, indeed, any strategy to set a time scale on their decommissioning. If they can operate until the commencement of the decommissioning, when does decommissioning commence? Does it commence as soon as the NDA takes over, or is there a time lag? Is it once the actual decommissioning has begun by the removal of fuel rods or whatever? There are many unanswered questions. We could have a situation where the NDA in effect starts running nuclear power stations and could become a generator. 
 I made that point in the Committee's first sitting, and the Minister was quite dismissive. When I raised it in an intervention, he said, 
 ''I assure the hon. Gentleman that the NDA's running of power stations will be limited, in the nuclear case, to the Magnox situation, with a defuelling and decommissioning programme being established. The role of the NDA is about decommissioning.''—[Official Report, Standing Committee B, 20 May 2004; c. 39.] 
The role of the NDA should indeed be about decommissioning. Allowing it to continue running the stations without setting out clearly a time scale bringing that to an end is muddying the waters in terms of the role. That could lead to confusion, to continuing of the nuclear legacy and, as has been mentioned, to making that nuclear legacy worse rather than trying to bring it to an end. 
 My one concern about the amendments, which I would be inclined to support, is the 12-month period. One of the problems of nuclear decommissioning is that it can take a long time. We have to be alive to that. 
 My own amendments try to place an obligation on the NDA when taking over a station to set a strategy for decommissioning that station. I have deliberately not set a time limit because every situation may be slightly different. If we set a statutory time limit of 12 months we could conceivably lead into problems if we are not able to begin the decommissioning within that period. 
 It is necessary to state clearly in the Bill that the role of the NDA is not about running nuclear power stations and that it will not be allowed to run nuclear power stations. I suggest that decommissioning should commence as soon as the NDA takes control of the nuclear power station and that a clear strategy and time scale are set at that point to avoid the confusion of continuing generation of waste by the NDA, which, supposedly, is to dispose of the historical waste.

Stephen Timms: The NDA is focused on decommissioning and clean up. Hon. Members who have spoken in this debate probably will have read the debates in the other place, where the Government consistently and firmly defended the position that the NDA is a decommissioning authority, not a commissioning or operations authority. There were moves elsewhere—we may come to them in this Committee, too—to change that. We firmly resisted them because it is our view that the NDA needs to have a clear brief about decommissioning.
 All the operational responsibilities for the NDA are linked to that primary responsibility, either because they contribute to clean-up or because it is impossible to separate the operational elements from clean-up. As it is drafted, clause 6(1)(a) already restricts the NDA's powers to operate a nuclear power station pending decommissioning. The reason for that is to capture the Magnox stations—as hon. Members have rightly said referring to my remarks last week—which will be among the first sites to be designated to the authority. They are all due to be closed within five years of the NDA being established. The hon. Member for Lewes said that there was not a time scale for that, but there is. The last, at Wylfa, will cease operations in 2010.As drafted, the Bill allows the NDA to operate the Magnox stations during that period in order to maximise the benefits to the public.

Michael Weir: I still have a concern. I understand what the Minister is saying, but the Bill says
''pending the commencement of their decommissioning'' 
and there is no time scale. Will the Minister give us an assurance that decommissioning will start as soon as the NDA takes over a station? The NDA could take over a station, but it might be a considerable time before decommissioning commenced.

Stephen Timms: The problem is that, by forcing closure within a year of designation, the amendment would mean quite significant revenue from a station's operation being foregone, with no benefit to clean-up. That may be the key point. The existing phased-closure programme for Magnox stations, which has been agreed with the regulators, is already optimised for managing the clean-up process. We cannot speed
 it up by closing the stations early, because of capacity constraints at Sellafield. The Bill allows us to take forward the decommissioning of Magnox stations as quickly as possible given those constraints, while allowing some revenue to be earned in the meantime.

Norman Baker: I understand the Minister's point about Sellafield. In tabling my amendment, I was not questioning the time scale for decommissioning Magnox stations; the date when they should finally shut. That is not the issue; the issue is the point at which they become the responsibility of the NDA and what the NDA does with them. I would argue that, if Magnox stations will be operational for another five years, the NDA should not be involved until later in the process.

Stephen Timms: No, I would resist such a constraint. It may well be appropriate for the NDA to take responsibility for those sites earlier so that, with regard to their management, the overriding concern of decommissioning can be in place as early as possible.
 I have another point about the use of the word ''pending'', whose meaning has been queried. It could not extend to operating a power station, either new or old, if the clear aim of decommissioning was not in sight, even if an intended closure date had been established. That may help my hon. Friend the Member for Morley and Rothwell (Mr. Challen), given the question that he asked me. 
 The Government have no proposals for new nuclear capacity at the moment. The economics are wrong, and big questions about nuclear waste have not yet been answered. If there were a move towards new nuclear capacity in future, there would need to be consideration of the decommissioning arrangements. Nothing in the measure would exclude the NDA's having such a role, but that is certainly not envisaged in what we are discussing today. 
 With regard to the point made a moment ago by the hon. Member for Lewes, involving the NDA early—rather than leaving its participation to the later stages, as he suggested—will be helpful in making decommissioning as effective as possible.

Norman Baker: Does the Minister accept that, under clause 6(1)(d), the NDA could be given responsibility for the two reprocessing plants at Sellafield as well as the Sellafield MOX plant?

Stephen Timms: The intention is certainly that the NDA should be able to take on responsibility for decommissioning the full range of civil nuclear sites in the UK. I think that that addresses the hon. Gentleman's question. With regard to the time scale to which the amendment refers, it would not be right to be more specific than we have been. The amendment would impose similar constraints on any other nuclear generating stations designated to the NDA in future. Lead-in times for decommissioning may change in future and we are talking about a period of up to 100 years. It may make sense for the NDA to take responsibility for a nuclear station at an earlier or later point in the preparatory stages of decommissioning to ensure the maximum effectiveness of the
 decommissioning work. We need some flexibility in legislating on a process that will take many decades. In practice, it is hard to envisage the NDA being responsible for operating a station for much longer than the time that I have indicated would be associated with the closure of the Magnox stations.
 The crucial point is that the NDA will only take responsibility for operating a station if the primary objective is to achieve successful and efficient decommissioning rather than to maximise operational revenues.

Michael Weir: Is not the Minister muddying the waters? If the NDA's primary function is to decommission, why give them a function of operating stations at all? If there is planned closure of stations, the existing operators will plan to operate them until the closure date. Surely it makes more sense for the NDA and the existing operator to work hand in glove and for the NDA to carry out its primary function of decommissioning along with the operator. I do not understand why the NDA is being given the power to continue operating. That seems slightly bizarre. It muddies the waters and gives rise to the danger that the NDA will in fact become an operator of nuclear power stations rather than a decommissioning authority.

Stephen Timms: I do not accept the hon. Gentleman's point. Given that the objective is decommissioning, it makes sense for the NDA to take responsibility for the site at an early stage; not to wait till the very end when the station has been closed and only then come in to do decommissioning work. He envisages some arrangement whereby the two work hand in hand. Surely, he accepts that if the focus is to be on decommissioning, as in the Government's view it must be, the earlier the NDA is in the driving seat, the better.

Michael Weir: I understand the Minister's comments, but that was not the point I was making. In effect, the Bill gives the NDA the power to become a generator. The Minister says that that would be for a short time, but that is not in the Bill. If there is a programme for closing stations—he says Magnox, but I believe that it covers any station—with the current generator still generating, why is it necessary for that generator to be let out of the loop and for the NDA to take over both generating and decommissioning? Surely, the principal object is decommissioning. The NDA could work with the generator, which would run down generation, while it dealt specifically with decommissioning and disposal or treatment of the waste.

Stephen Timms: The question is, which arrangement will be the most effective in terms of public interest? I am arguing that involving the NDA, giving it responsibility and designating to it earlier is a more effective way of accomplishing the task—it also includes an opportunity to earn some revenue while the station is still operating—than leaving its involvement until a later stage. The hon. Gentleman
 has not suggested any reason why that should not be the case. I am persuaded that it is the case and that early NDA involvement is in the general interest.

Norman Baker: At the Committee's first sitting, the Minister stated in response to the hon. Member for Angus (Mr. Weir):
 ''I assure the hon. Gentleman that the NDA's running of power stations will be limited, in the nuclear case, to the Magnox situation''.—[Official Report, Standing Committee B, 20 May 2004; c. 39.] 
The Minister confirmed a few moments ago that, under clause 6(1)(d), the NDA will indeed be able to operate the two reprocessing plants at Sellafield as well the MOX plant. Which of those statements is inaccurate?

Stephen Timms: I do not believe that either of them is inaccurate. Clause 6(1)(d) does cover THORP and Sellafield's MOX project. We cannot separate such operations from the management and clean-up of the site shared facilities.
 The hon. Member for Angus said that the temporary nature of the operation is not in the Bill, but it is. Clause 6(1)(a) refers to 
''the operation, pending the commencement of their decommissioning''. 
It is true that we have not said how many months that might take, but the temporary nature of such involvement is crystal clear in the Bill.

Michael Weir: Is the Minister ready to define temporary? As a time scale, ''pending the commencement'' is completely meaningless.

Stephen Timms: It is not meaningless. It has a very clear meaning, particularly in the light of the fact that there is an existing time scale for all the Magnox stations to be closed by 2010.

Norman Baker: I am not convinced by that and I intend to move to a vote because the Minister has been at his least convincing on the amendments before us. As the hon. Member for Angus rightly said, the phrase
''pending the commencement of the decommissioning''
 is entirely meaningless. It could be at any point in the life span of the nuclear installations in question. The Minister also said that he was in the driving seat. He is not, for the very reason that he gave about the constraints at Sellafield and the fact that the Magnox stations cannot be decommissioned earlier because of those constraints. 
 We are faced with a situation in which the NDA in theory will decommission stations very quickly, but in fact will not be allowed to. Those stations will remain operative until at least 2010, during which time they will act as a generator and a producer of nuclear waste; at the same time as they are commanded by the Bill to deal with the problem, they will be adding to it. 
 The measures also blur the line between the generation of nuclear energy and the decommissioning of nuclear facilities. It is very important that those two are kept separate. The NDA must be seen to be independent. The Minister has said that he wants to see independence and transparency, but he is blurring those lines. 
 Notwithstanding what the Minister says, there is no certainty that the power stations will be decommissioned in 2010. They could go on for longer, and we have had a succession of due dates for decommissioning. The Magnox stations were supposed to have a life span of 25 years, but they have been continually extended. That may be the right position for those stations, but we can be no more certain of 2010 than we can of previous decommissioning dates. 
 Clause 6(1)(a) allows the NDA to go in very quickly after enactment and run the Magnox stations and the MOX plant for an indefinite period. That is stated in the Bill and the Minister has done nothing to clarify that or assuage me. He also creates financial uncertainty because of the relationships between the generator and the NDA in the operation of those stations. That introduces the question of the sensible use of public money and how accountable those involved are. 
 The Minister also fails to understand what he has said. I can assure him—I hope that he will look at this—that there is a conflict between what he said on Thursday 20 May, when he specifically stated that 
 Magnox was the only classification of nuclear installation to be dealt with by the NDA, and what he has admitted this morning in clause 6(1)(a). He must sort that out. I am not all happy with that and I intend to press for a vote. 
 Question put, That the amendment be made:—
The Committee divided: Ayes 2, Noes 11.

Question accordingly negatived. 
 It being twenty-five minutes past Eleven o'clock, The Chairman adjourned the Committee without Question put, pursuant to the Standing Order. 
 Adjourned till this day at half-past Two o'clock.